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Summary:
Hal Reid recently had a discussion with Robert Welch, president of Synergos Technologies, about a new addition to the company’s PopStats demographic product. The latest release of PopStats, which is updated every quarter, includes 15 neighborhood consumer segmentation categories. The company is the first to include lifestyle classifications in a demographic data set that is updated quarterly.
These 15 category names are listed in the table below. The complete description of these categories is available in a PDF file.
While these categories encompass a more detailed lifestyle product, they do allow for mapping of key factors that can help identify the nature of both potential and existing markets.
I asked Welch several questions related to this release and about the company’s overall view of demographics, summarized below.
Hal Reid (HR): STI has produced quarterly demographic updates for some time. This is the first time you have added consumer segmentation data to the quarterly updates. What prompted you to add this feature to what has been a very successful product?
Robert Welch (RW): We see PopStats as a living product subject to changes that allow it to continually morph into what our customers want. Using this release and the inclusion of our 15 consumer segmentation categories, PopStats now provides the means to quickly map - in sort of demographic shorthand - a clear view of the "lay of the land."
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HR: As PopStats is released on a quarterly basis, do the lifestyle categories also change in so short a time frame?
RW: Typically the categories can take up to five years to change. However, because we publish quarterly, we can show the lifestyle categories of new neighborhoods as they form.
HR: Of these 15 categories, which is the most interesting in terms of spending habits, product acquisition, etc?
RW: The Single (not married) categories are interesting because there are now more single persons than married in the overall population, as has been reported by the US Census, as well as our own findings have shown. There is no question that singles are becoming a dominant force in the market. Also, we have placed a great deal of focus on the Hispanics category - growing fast, 19.7% since April 2000, while non-Hispanic categories are growing at 2.9% per year.
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HR: Can you talk about the amount of effort required in creating and maintaining quarterly updates?
RW: One of our strengths is the automation of processes. It was a huge task figuring out how to automate a process that involves a number of computers that run 24/7 and in effect need to talk to each other and make some basic decisions without human intervention - basically a simple form of parallel computing. Because the process is so highly automated, one of the most interesting things is that we could do estimates monthly if we were so inclined.
HR: Innovation in your approach to the creation of demographics and trying to move them as close to real-time as possible have been hallmarks of STI. To what do you attribute that?
RW: Primarily, users’ requests. In the quest to make our product as relevant as possible, I am very much in touch with our user community. I call my customers at least semi-annually and try for quarterly calls. I let the users guide me as to how the product should evolve. For example, I was talking to a client a couple of years ago who was having problems with RV parks. There were no reliable demographics that met his needs. I was asked, could you predict RV park populations? It took us took a year and a half to research the problem and in the end we created a demographic field called transient population. That is, RV parks, campgrounds and hotels. Now we have a good estimator in place for that particular population segment and it was entirely user initiated. Now, transient population is one of our most sought-after variables. Here’s an interesting fact for you, 80% of new variables come from users’ requests.
HR: How about forward looking applications of your data? Is there something unique that your users are able to do because of the advantage of receiving quarterly updates?
RW: We have a number of users who are using PopStats to project growth, allowing them to anticipate where population growth is going to occur and therefore be significantly more proactive in their real estate decision process. Along with our demographics, some are also applying the knowledge available from within our consumer segmentation product, so they can begin to look forward as to the nature and rate of growth and find those areas that are most ideally suited for their products.
HR: Can you provide a glimpse of what is coming from Syngeros Technologies?
RW: We have several things that will be available in the October release that I can’t speak to at this time.
It is interesting that quarterly demographic updates are both available and are being used to model future growth. All retail developers would like to know where the next big trade area is going to be so they can buy early. With a better understanding of the potential population growth of consumers, retailers will be better able to discern the appropriate product selection and optimal number and location of retail stores for the region. They could potentially set up shopping center leasing activities years in advance. Being able to predict the future has always been a competitive advantage
